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Tesco reports its biggest growth in seven years thanks to the acquisition of Booker: Tesco Share Price
The largest supermarket chain in the United Kingdom. Tesco, has registered its greatest progression in seven years thanks, in large part, to price reductions and the multimillion-dollar acquisition of Booker, the reference food wholesaler in the country.
The increase in Tesco sales reached 1.8% in the 13 weeks prior to May 26 compared to the same period of the previous year, while only in the Great Britain and Ireland market the increase was 3.5 %, according to the annual supermarket report published last Friday, June 15, whose data is echoed by the specialized publication ‘Drinks Business’.
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In 2017, Tesco acquired the wholesaler Booker in an operation valued at 3.7 billion pounds (4.4 billion euros). Thanks to this transaction, the wholesaler obtained a rebound in its sales of 14%. Dave Lewis, chief executive of Tesco, said that the supermarket giant has reduced prices by 7% since 2015, with sales of 300 million pounds (360 million euros) in sales in the United Kingdom alone.
The price drop of Tesco -one of the four major British distribution chains- is part of its commercial strategy to strengthen its position as the most influential retailer in the country and fight against the rise of Lidl and Aldi discount supermarkets.
“Our growth plan is following the pace we planned,” the CEO recently told the Guardian newspaper. “We are beginning to understand the potential of our union with Booker.” For his part, Freddie Lait, executive director and founder of Latitude Investment Management and Tesco shareholder, has remarked that there are also “a good number of growth indicators that indicate that margins could double in the coming years”.
Tesco Share Price “There has been significant progress in reaching out to new opportunities and avenues for growth with our suppliers. Synergies like Booker’s will help to expand margins in the future”, concludes the manager.